What I Had Hoped
Though you never would believe such a thing is possible, I treaded lightly when I wrote my post spoofing the never-ending debate over real estate commissions by comparing those commissions to the tip we pay our server when we go out to eat. What I had hoped was to spur one and only one thought – “who the hell cares what a server makes? It’s none of our business, right?”
In that respect, I believe the post for all of its brilliant wit failed.
Maybe I’m being a bit too hard on the poor little post. Maybe stopping or even slowing the debate over what real estate agents make is like trying to stop a speeding train with an elk. The elk will cause a little damage but at the end of the day the train’s going to keep rolling on.
This Time It’s Personal
I’m stealing dear Poppy’s headline but I’m certain I’ll be forgiven. The debate over real estate commissions and how they’re paid and whether they are fair and whether there will be or must be a change is personal for me, not because I particularly care what your opinion of how I conduct business might be but because there are people who feel it’s open season for debate in the first place.
Your theories are my 1099s. If you are a client (or prospective client) and you don’t agree with what I charge in my business, don’t hire me. Just like if you don’t like the product or prices in a store or a restaurant, you have the right to shop elsewhere in the mall. If you’re not a prospective client, you’re not going to pay me a cent anyway so why the hell do you care if someone else is willing to do so?
Let’s Talk About Your Salary
If you feel real estate commissions are fair game for discussion, that’s fine. But let’s be fair. Please comment below with your job description and current salary. I then will find an appropriate message board and we’ll start to discuss whether the public should have to pay your salary for the benefits we as a group recieve. If you’re not public-facing, no matter. I’ll find a way to tie it to a public product where the cost of your salary is included in the price of whatever the product happens to be.
Ludicrous? Why? Shouldn’t everyone’s 1099 and W-2 be open to public scrutiny? Is a real estate agent really so much more of a public figure that there’s a different standard for us than for anyone else who earns a paycheck and isn’t in same way receiving funding from the tax base as a whole.
Put another way, unless you’re the one hiring me you’re not paying me a cent. So mind your business.
Bluffing With Bull … er, Rhetoric
Of course, to some out there the debate is their entire reason for existence. It took a little longer than I had expected but any commission debate almost always will lead to comments from the agents who charge a flat rate that theirs is the only viable business model.
If such a model works for you, go for it. Just don’t tell me that I have to change or else I’ll be out of this business. Because that’s simply not true.
A couple of years ago, a high profile agent here in Phoenix (who even sells a home once in a while) enacted a rebate/flat rate model for buyers. I predicted that there wasn’t sufficient interest among the buyers’ set for the model to gain any traction. Shockingly, I was correct. (Still waiting for that admission to come.)
There are consumers looking for the best bargain just as there are consumers who will pay a little more if they perceive they’re receiving additional value. It’s a basic fact. Morton’s remains in business and so does McDonald’s. Different tastes for different budgets.
But you never see McDonald’s telling Morton’s that they have to drop their prices or else. Somewhere down the line, it was realized that the best way to market yourself is to market what it is you do, not what is wrong with someone else. You can be the product of choice or the lesser of two evils. That choice is yours.
Hit Me With Another Analogy, Baby
Once upon a time, all stockbrokers worked on commission. Back in the 1970s rules were changed and along came Charles Schwab, who introducted the concept of “discount brokerage.” Schwab since has gotten away from the idea of “discount” because, predictably (not but not then when there was no Internet), others entered the market who could do the same thing for less.
Fast forward to 2008 and guess what? The so-called traditional stock brokers still are working on some sort of commission model, just as they always have. And there also are a number of places where you can trade your stocks for a flat rate so easily that even a creepy talking infant can do it.
There’s room in the marketplace for both. There’s a different client set for both. And both still flourish.
So What’s the Real Issue?
You mean, other than the fact that I’m tired of the idea that my tax return is open for public debate?
It’s just this – that the real issue here, what commissions the public “should” pay, is nothing more than a false argument brought to life through the Internet. Whether a question makes any sense is irrelevant in a day when anyone with a computer camera can be an “iReporter” for CNN (as opposed to just being some guy or girl with a camera.)
The question of whether real estate commissions have to come down is a non-question. What happens in my market is different than what happens from yours, and both are different than what happens in Canada.
As long as there are buyers and sellers for both flat rate and percentage models, both models will continue to co-exist … almost as peacefully as the strident hard-liners who identify more with red states and blue states than the United States.
No elk were harmed in the writing of this post
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
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